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Bridging Finance Calculator

Bridging finance can be a complicated matter but our bridging finance calculator can help demystify some of the numbers. Find it below.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: June 28, 2022

If you need to purchase a house quicker than a conventional mortgage can be turned around, a bridging loan can offer a solution. But how much can you borrow via such a loan? Will the higher interest rates be something you can afford? And are the extra fees manageable for you?

Enter a bridging loan calculator. Providing you with some rough estimates, it can help you decide whether a bridging loan is worth pursuing and what repayments will be manageable for you over the mortgage term, which is anywhere between 6 to 24 months.

Try our bridging loan calculator

Bridging loans can be acquired for an amount anywhere between £50,000 and £15 million but what a lender is willing to offer you will be based on the value of the property you’re looking to buy, the amount you wish to borrow and the deposit you have.

Inputting this information into our bridging loan calculator below will give you some quick calculations of what your repayments are likely to look like, considering interest rates and fees.

Bridging Loan Calculator FULL

Loan Information

Financial Analysis

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What a calculator can’t factor in, however, is the reason for the loan, which often plays a role in lenders’ decisions – perhaps you’re buying a house at auction, a home considered unmortgageable or want to get an offer in before another bidder.

This is why it’s worth supplementing a bridging loan calculator quote with advice from a broker specialising in this type of finance. They can take a look at your specific situation and verify what a bridging loan for you is likely to look like.

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How is a bridging loan calculated?

To calculate your bridging loan, a lender – and any bridging loan cost calculator – will factor in the net amount you’re asking to borrow, value of the property, how long you’d like to borrow for, and the deposit you have.

The calculator also adds on an interest rate and factors in extra fees such as the lenders’, valuation and legal fees, to give you a breakdown of what the monthly repayments could amount to, the total interest you’d pay and the final loan amount.

It’s important to note that some lenders will use more complex calculators that take additional factors into consideration while factors such as your income and exit strategy, credit history and debt, age and property development knowledge (if redeveloping a property) will play into a lender’s final decision.

How the interest rate is worked out

In the case of a bridging loan interest rates are likely to be a little higher than other mortgage products and charged at a monthly rather than annual rate. That’s because of the quicker turnaround time – typically under two weeks – and the fact that it is designed as a short-term solution until longer-term financing comes in.

At the time of writing, a typical monthly rate would sit somewhere between 0.39% and 1.5%.

To narrow down what figure is likely to come with your loan, a lender will consider your credit rating as well as the viability of your exit strategy; are you planning to refinance onto a traditional mortgage, sell the property once it’s been redeveloped or pay it off once another form of financing comes through?

How the extra costs and fees are worked out

As well as interest, there are a range of fees associated with bridging finance, which makes them a costly endeavour. Firstly, most lenders charge a small percentage of the total loan as an arrangement fee. That percentage tends to be 2% but this can vary depending on the bank or building society you opt to loan from. If you loan a larger amount this may drop to 1% and, in some rarer cases, a lender may eliminate it altogether.

Then there are valuation fees. Any lender will require a valuation be completed of the property the bridging loan is being taken out for. Prices for these vary depending on how much the property is worth, where it’s situated and whether or not a desktop or on-site valuation is needed.

The table below provides bridging loan examples that factor in a 2% lenders fee and a deposit around the 25% or 30% mark.

Loan amount Value of the property Term length (months) Interest rate Monthly repayment Total loan amount+interest+fees
£100,000 £150,000 6 0.5% £510 £105,060
£120,000 £180,000 12 0.5% £612 £129,744
£180,000 £250,000 12 0.5% £918 £194,616
£140,000 £200,000 12 1% £1428 £159,936
£210,000 £300,000 6 0.5% £1071 £277,626
£200,000 £300,000 6 1% £2040 £216,240
£300,000 £430,000 12 0.5% £1530 £324,360

Other potential fees to account for include exit fees, solicitor fees and broker fees. The brokers we work with offer an initial consultation at no charge and will then lay out a pricing model beyond that.

Are bridging loans calculated any differently in Scotland?

No, bridging loans are usually calculated just the same in Scotland but your postcode may make it harder to find a bridging finance lender who will offer you a loan.

This is because more remote places such as the Highlands and islands often have various postcode restrictions that affect the mortgage products you have access to. If you are looking at buying a property there, get in touch with a broker as they’ll be able to share details of bridging loan availability in Scotland, draw up an estimate for you and recommend specialist Scottish lenders offering bridging finance.

While there are fewer lenders in Scotland, in recent years the numbers have grown meaning more competitive rates than before.

How a bridging mortgage is calculated

Many people go into a bridging loan knowing that they plan to transition onto a residential mortgage as their exit strategy. This is known as a bridging mortgage and can be done with the same lender or a different one, depending on who is likely to offer you the best long-term deal.

To work out what they’re willing to offer you as a residential mortgage, lenders will typically use a bridging loan calculator to decipher the initial amount needed followed by a standard mortgage calculator to determine how much of the debt from the bridging loan will be carried over onto the residential mortgage.

They’ll also be employing the usual criteria to decide on your eligibility and how much they’re happy to offer as a mortgage. This includes looking at your income and spending, any debt, your credit history, age and the property in question.

Usually the interest rate will be lower than on the bridging loan and the typical term is 25 years versus the bridging loan term of between 6 months and 2 years.

Get a bespoke quote from a bridging loan specialist

Bridging loan calculators offer a great indication of what you can afford to borrow and how much you’d be paying back over that short time period. Supplement that with the knowledge of an experienced broker who can factor in all the nuances involved in bridging finance – what you need to qualify, your exit strategy and any possible renovation experience required – and you’ll have a detailed picture to base a decision on.

The experts we work with can then support you in the loan application, share the best bridging finance lender for you, negotiate terms and assist in the transition at a later stage to a bridging mortgage should you so choose.

Use our bridging loan calculator for an initial idea and then give us a call on 0808 189 2301 or make an enquiry to be matched with a bridging finance specialist for a free initial chat.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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